29 September 2023

Hurray! Bitcoin is up 4% this month – for the first time since 2016, we are likely to have a positive return in September.

Heading into October, which has been largely a positive month, traders are hopeful that this becomes the start of a sustained run in the markets.

As of now, Bitcoin trade volumes are coming off a 6-year low, indicating a period of accumulation by long-term investors with Microstrategy announcing a cool 5,445 BTC purchase this week.

Everything is hopeful. We cover another such story today, in our Hot Take. The focus is on the evolution of crypto in India and why global exchanges are ramping up their teams/operations in anticipation of a future win.

Top-3 stories of the week:

1

2

3

The newsletter is put together by Giottus Crypto Platform and The News Minute’s Brand Studio. You can read all the previous issues of Cryptogram here.

Was this newsletter forwarded to you?

WEEKLY MACROS

• Total crypto market cap - $1.07 trillion - UP 1.9%

• Bitcoin price - $26,921 - UP 2.5%

• The dollar index (DXY) - 106.04 - UP 1.1%

• Bitcoin Dominance - 49.98% - UP 1%

• Crypto Fear and Greed Index - 48 - the market is in neutral state

ICO CALENDAR

• 4^th Oct - EDrive (EDT)

• 5^th Oct - SOIL (SOIL)

THE HOT TAKE

The start of an Indian decade

The headlines in the 2010s belonged to Bitcoin and its adoption by a few nations such as the US and, China. While the aim of crypto is to be global and equal, it was difficult to access crypto assets without a significant premium for an Indian investor. The mushrooming of reputed exchanges around 2017-19, some of which continue to operate today, helped change this scenario.

The past five years have been a wild ride for crypto in India – RBI’s ban, Supreme court overruling it, regulatory uncertainty, introduction of a tax regime, NCPI’s ban and the G20 presidency are some of the highlights. The real highlight is what happened on-chain – millions of investors accessing and trading in crypto.

Today, we cover some recent trends that elucidate why we think the 2020s will be an India story.

1) Chainalysis says India is a top 2 market already

A recent study by Chainalysis states that India is world’s second-largest crypto market in terms of transaction volume and has recorded approximately $269 billion in crypto value received between July 2022 and June 2023.

More pertinent to note is that the study suggests that more than 20 million monthly traders access crypto and a lot of volume seem to be happening on decentralized exchanges (DEX).

According to an excerpt from Chainalysis’s upcoming 2023 Geography of Cryptocurrency Report, India is also leading in the grassroots adoption index across centralized and decentralized exchanges. Despite the steep capital gains tax and TDS, the country has managed to rank #1 across services provided to retail investors.

2) International exchanges are setting up operations and budgets

We will always remember the fanfare around Coinbase, a US-listed entity, announcing its entry into India in 2022. Alas, it was short-lived post a communication failure.

But efforts by other global exchanges are slowly gaining momentum. Gemini announced a $24 million investment plan this week to build its operations in India. Gemini will open a development center in Gurugram that will be responsible for core platform fundamentals in the areas of compliance, data pipelines and warehousing, security, and payments. The exchange is on a hiring spree across domains and their India operations are expected to be the second largest behind US.

With India closer to possibly getting a concrete set of crypto regulations early next year, other crypto firms have also stepped into the market. While Binance and Kucoin already enjoy a presence (in terms of trading volume) in the Indian market, OKX, based in Seychelles, is also scheduling a full-fledged expansion to India. This follows Gibraltar-based cryptocurrency bank Xapo’s announcement of their expansion plan in June.

3) Registered Indian exchanges will become the vanguard of future growth

This week, Giottus and other Indian crypto platforms have announced being part of a new initiative named ARIFAC - Alliance of Reporting Entities for AML/CFT. ARIFAC is a collective of reporting entities spanning various sectors, including banks, Non-Banking Financial Companies (NBFCs), and payment aggregators as well as the FIU. As a member of ARIFAC, platforms are expected to improve adherence to compliance rules and regulations while promoting information sharing and knowledge exchange.

This progression in reporting is leading towards an environment where crypto regulations are well-defined and platforms are accorded a ‘registered’ or such status in the country.

It’s a win-win for the government, the investors and key Indian stakeholders in crypto. Global platforms will likely partner with local platforms to boost innovation.

4)  A strong growth in the jobs market

Crypto has come a long way in India, not only as an investment but also as a career. By 2030, the blockchain and crypto industries may well be the most sought-after field for young graduates. The avenues to explore are many – not only in the tech side of things but also in communication, marketing and customer service. India can likely become the go-to market for crypto based talent if our educational institutes pick this trend up early.

5) A seamless rupee <> crypto experience

We have covered this earlier. The advent of retail CBDC (eRupee) in India and the opening of UPI doors to crypto are great companions to the crypto journey of an investor here. We have to be patient – another couple of years, we will have the best crypto experience globally much like with our UPI.

Key takeaway

The real takeaway today is hope. We, Indians, are no longer a fringe player in the crypto ecosystem. Soon, we will be able to innovate and demonstrate our expertise in this field on a global playbook. We need to equip ourselves, with knowledge and the right approach to crypto. We can benefit from crypto as an investment, as a career and as a beacon of India’s ambitions.

Was this newsletter forwarded to you?

If you have any questions or feedback for us, write to us at [email protected]. You can check out the previous issues here.

Disclaimer: Crypto-asset or VDA investments are subject to market risks such as volatility and have no guaranteed returns. Please do our own research before investing and seek independent legal/financial advice if you are unsure about the investments